What’s Happening With House Prices Across The UK?

House prices in the UK have started to drop month on month, with the average house now worth £400 less than a month ago. The UK’s average sold price is now £260,800 - a rise of 5.3% in the year to January 2022. This rate of price growth is continuing to slow and we expect it to turn into annual price falls of around 5% by the summer.

The monthly House Price Index uses more data than any other, so we can get the most accurate picture of house prices across the UK.

Where are house prices rising the most?

With buyers now flocking back to urban areas after the rural migration during the pandemic, they’re finding value for money in well-connected towns on the outskirts of major cities.

Strong demand around Manchester is pushing prices up in Wigan (9.0%), Oldham (8.6%) and Rochdale (8.5%). Similarly, the West Midlands is seeing house prices rise in well-serviced areas close to Birmingham, such as in Wolverhampton (9.8%) and Worcester (8.3%). Meanwhile, affordable spots in Scotland and Wales are also seeing above-average house price growth - in Kirklees (8.0%), Scottish Borders (7.7%) and Bridgend (7.8%).

Wychavon and Malvern Hills can be seen as outliers in this list, with strong price growth accompanied by already-high prices. These more rural West Midlands districts gained appeal during the pandemic search for space, while proximity to main employment centres means they’re still attractive in the current movement back towards cities.

The UK cities with the highest house price growth

Of the UK’s major cities, Nottingham has recorded the biggest house price growth in the last year of 7.8%. It’s followed closely by Birmingham (7.4%) and Leicester (7.3%), with these cities playing a part in the West Midlands’ strong regional price growth. These include Manchester (6.9%), Cardiff (6.5%), Liverpool (6.5%), Portsmouth (6.2%), Sheffield (6.0%) and Leeds (6.0%).

At the other end of the city index, the lowest house price growth can be seen in Aberdeen (0.2%), Glasgow (2.7%), Oxford (2.8%) Edinburgh (3.1%) and Cambridge (3.2%).

The UK regions with the highest house price growth

When we look at the UK’s regions, house prices have risen the most in Wales over the last year, with the country recording a 7.1% rise. It’s followed by the West and East Midlands, then the North West and the South West - in all these regions house prices are rising faster than 6% over the last year.

On the other hand, house prices in Scotland (4.4%) and Northern Ireland (4.5%) are rising the slowest out of all UK regions, with the South East (4.7%) and East of England (4.8%) only slightly ahead.

Where are the cheapest house prices in the UK?

The cheapest areas to buy a home in the UK right now are all located in Scotland and the North of England. The prominence of Scottish regions is down to a greater balance between property and wage growth than the rest of the UK.

Scotland dominates the most affordable areas list, with modest pricing and stronger relative earnings making a home move more accessible for many. For home movers on average salaries, mortgages are more affordable in these lower-value locations, especially if they have built up some equity in their current property.

Where are the most expensive house prices in the UK?

When it comes to the most expensive places to buy a home, it’s all about London and the South East. Kensington and Chelsea is the only place where the average house price pips the £1 million mark. The City of Westminster is a clear second place at £976,800, and is notably recording annual house prices falls right now. Homeowners here have lost £2,790 on their home’s value in the last 12 months. House prices in Richmond, Camden, Hammersmith and Fulham, and Elmbridge all sit above £700,000. Price growth is low in these areas, with stretched affordability for London buyers limiting the scope for price increases over the last five years.

We’re expecting house prices to fall by around 5% to 8% in these inner London boroughs in 2023, which will improve affordability and support a rebound in these markets. The leafier boroughs of Richmond, Elmbridge, South Buckinghamshire and Chiltern are faring better in price growth but still sit below the national average price growth of 5.3% over the last year.